Market is betting on verdict for Igen

Stock climbs $1.30, is up 26% since start of the Roche trial

November 22, 2001|By Julie Bell | Julie Bell,SUN STAFF

Igen International Inc. shares continued to rise yesterday, closing at a six-month high of $36.73 on speculation that the Gaithersburg company will win a favorable court settlement in its contract dispute with Roche Diagnostics.

Shares rose $1.30 yesterday, nearly 4 percent, on the Nasdaq stock market. The gain caps a surge of more than 26 percent since Oct. 25, when the trial of Igen's suit against Roche began in U.S. District Court in Greenbelt. In five months, shares have gained 75 percent from a low of $20.97 on June 18.

"From what we can tell, the trial is going very well in Igen's favor," said John M. Putnam of Gruntal & Co. "We don't think Roche will have much to present in its defense."

Putnam expects Igen, a Gaithersburg maker of medical diagnostic tests, to win either a jury award or a favorable settlement that could exceed $1 billion. Putnam has written at least three research reports, all favorable to Igen, since the trial began.

Igen rested its case this week, and Roche is to begin presenting its side Tuesday. An Igen spokesman declined to comment on the specifics of the case yesterday, and the company's attorneys couldn't be reached.

Holli Rafkin-Sax, a Roche spokeswoman, said the company continues to feel it has "a very strong case."

The trial is the culmination of a long-running dispute between Igen and Boehringer Mannheim GmbH, which Igen sued in 1997 and Roche later acquired.

Among other things, Igen accuses Roche - which uses Igen technology in some of its medical diagnostic tests - of failing to pay Igen the royalties it deserves, failing to aggressively sell the technology in markets Igen licensed to Roche and failing to maintain records needed to compute royalties.

Roche, a unit of F. Hoffman-La Roche Ltd., the Swiss health care company, is Igen's largest licensee, accounting for 90 percent of its $16.2 million in royalty income in the fiscal year that ended March 31.

Igen posted $31.4 million in total revenue in its last fiscal year, losing $43.3 million, or $2.84 per share.